As a property manager, you’re no stranger to tracking your revenue and expenses. When it comes to increasing your rental income, there’s always room for improvement.
Besides, the numbers and Excel sheets and thousands of tabs can get intimidating and overwhelming. Here we’ve boiled down the essentials you need to better manage and track your rental revenue and expenses.
Categorizing your expenses will give you a detailed view into the financial health of your property management business.
First, start by creating a comprehensive list of expense categories tailored to your brand. Common categories can include:
Challenge yourself to include other expense categories specific to your business. If you own lots of seaside properties, you may have a separate expense category for hurricane season preparation and protection alone.
This process will help you gain better visibility into your spending patterns and identify areas for potential savings.
Next, use this information to inform your budget. Review and re-establish your budget as your business needs may change. If you’re newer to the property management industry, it may take longer to obtain enough historical data to have a perfect budget the first year.
In addition, take into account industry benchmarks and macro-economic forces that could help or hurt your business. Due to the nature of the economy, setting aside funds for emergency costs is a must. Developing a realistic budget is crucial for maintaining control over your property expenses.
If you can save some time simplifying or automating these tasks, make sure you have the right software to do so!
Leverage the power of modern property management systems (PMS) to streamline this expense tracking process. A reliable PMS can help automate expense entry, generate reports, and provide real-time insights into your financial performance. Look for a PMS that offers robust expense management features, including the ability to upload receipts, set expense limits, and track vendor payments.
Our Streamline software can give you this kind of visibility.
On the other side of the coin, revenue management is just as vital for understanding your brand’s financial health.
Implementing a bookkeeping system through your PMS will allow you to avoid doing some mind-numbing accounting work. This system should maintain accurate and up-to-date records of all your rental income and expenses.
Using accounting software to simplify your bookkeeping tasks will save you many headaches. By all means, look for software that can reconcile your bank accounts and credit card statements automatically. This ensures that all transactions are accounted for correctly.
In addition, tracking where your rental income comes from can better inform your rental rates. Ensure that you capture income from all sources, including direct bookings, online travel agencies (OTAs), and any additional services you offer. As a result, your prices stay competitive. Above all, it helps you adjust to market trends to maximize your income potential.
Finally, automating your expense tracking and analyzing financial reports give you a clear picture of where your opportunities lie.
Your property management software should have features to help you generate these expense and revenue reports.
In fact, Streamline software has a robust revenue management tool that can automate these.
Automating these tasks saves time, minimizes errors, and provides you with accurate financial data for analysis and decision-making and increasing profitability.
Tracking your expenses as a property manager in the vacation rental industry is essential for maximizing profitability and ensuring long-term success. By using these tips, you can streamline your operations and gain better control over your rental revenue and property expenses.
Remember, accurate expense tracking and financial analysis are the building blocks to becoming a successful property manager in the vacation rental industry!
To learn more about how we can help you meet your revenue goals, click here.
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